Image: Trevor Nichols/Huddle.
The restaurant industry in Atlantic Canada is feeling a bit more relieved after the Federal Government announced a new rent subsidy program last week. Under the new program, businesses can get direct support to pay rent and mortgages, if they have experienced a drop in revenue during the pandemic.
The support will last until June 2021, and is retroactive to September 2020. Eligible businesses can be covered up to a maximum of 65 percent of their rent or mortgage. Businesses that have been temporarily shut down due to a public health order can get 90 percent of their rent covered.
Such a rent-subsidy program has been on the Covid-19 wish list for restaurant owners since the early days of the pandemic. Luc Erjavec, Restaurants Canada Vice President for Atlantic Canada, applauded the new rent subsidy program announcement, saying “Rent is the number one fixed cost for a restaurant.”
“The money is going to go directly into the hands of the tenants, which is important,” said Erjavec. “The old program, it was the landlord that had to apply and a lot of times they were unwilling to apply. So that’s very positive that the money will go directly to the tenant so they can use it for a fixed cost like rent.”
“The issue is, the details aren’t out there yet; the legislation has not past, so it could be a couple weeks or months before this comes into place. October rent was due two weeks ago; November rent is due in two weeks. And I’m hearing from some operators that the landlords are banging on the door saying, ‘give me my money.’”
The previous rent subsidy program was much criticized by the business community, because rent relief was dependent on the landlords applying to the program, not the tenants.
Under that program, commercial landlords could get 50 percent of rent covered by the federal government, with the tenant only paying 25 percent, and the other 25 percent forgiven by the landlord. However, the landlord first had to agree to lower rent by 75 percent. Many have pointed out that the tenants don’t benefit from the program unless the landlord chooses to apply, and many landlords chose not to apply.
Erjavec is hoping the details of the program, and the money, will be available soon. The slow winter months for restaurants is around the corner. On top of that, an August survey by Restaurants Canada showed that, in the Atlantic region, 45 per cent of restaurants were losing money, and 25 per cent were breaking even.
Those numbers may look bleak, but they are an improvement from the stats compiled in June. At that point, 68 per cent said they were operating at a loss and 20 per cent were breaking even.
At the same time the federal government announced the new rent subsidy initiative, they also released information on two other programs. The wage subsidy program, which covers up to 65 per cent of employees’ wages, has been extended until June 2021. The CEBA interest-free loan program has also been expanded. Businesses affected by the pandemic can apply for a $20,00 loan, on top of the original $40,000 that was announced at the beginning of the pandemic.
Derek Montague is a reporter with Huddle, an Acadia Broadcasting content partner.
